If OK'd, bill to disclose lawmakers' contract income

Time is running short for a bill that would close a legal loophole that allows Minnesota lawmakers and other public officials to shield income from independent contracting work from public view.
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Time is running short for a bill that would close a legal loophole that allows Minnesota lawmakers and other public officials to shield income from independent contracting work from public view.

The bill passed the Minnesota House last month but has yet to come up in the Senate. Closing the independent-contracting loophole would require public officials to disclose such income as they do other types of income or assets.

The bill also requires public officials to disclose information to a superior about their spouse's finances in situations where it may present a conflict of interest. And it requires a state agency to audit public officials' financial disclosures and other reports.

As of Thursday, a Senate vote had not been scheduled on the bill. A Monday deadline looms for lawmakers to conclude the 2014 session.

Minnesota, despite its clean-government reputation, is not a national leader in requiring public officials to be transparent with their personal finances. A 50-state investigation found its disclosure requirements in that area are more lax than many other states.

Meredith McGehee is policy director at the Campaign Legal Center, a Washington, District of Columbia, nonprofit that works on campaign finance and government ethics issues. McGehee said such gaps in disclosure requirements allow public officials to be opaque with information of which the public should be aware — such as how they earn a living.

"That's a pretty big loophole," McGehee said of the Minnesota law. "You might call it a loophole; I would probably call it a road map."

Rep. Laurie Halverson, DFL-Eagan, is the bill's House author. It would apply to state lawmakers and other public officials such as cabinet-level agency heads, judges or county commissioners.

The nature of Minnesota's part-time Legislature is that most lawmakers have outside jobs. She said that's fine, but the public has a right to know how lawmakers are being paid, in part to identify possible conflicts of interest.

Still, Halverson said she knew selling some lawmakers on the bill would be a challenge.

Halverson's bill passed the House last month on a 76-48 vote. St. Cloud-area representatives joined the majority of Republicans in opposing the bill, except Rep. Zachary Dorholt, DFL-St. Cloud, who voted for it, and Rep. Sondra Erickson, R-Princeton, who did not vote.

Rep. Tim O'Driscoll, R-Sartell, moved to table the bill during House floor debate, a motion his colleagues rejected. O'Driscoll said he and other Republicans support many of the bill's broad aims but couldn't obtain technical changes they felt were needed.

O'Driscoll also said some earlier versions of the bill were too broad in the financial disclosure requirements for public officials' spouses.

"Who then is ever going to step forward and be a public official if they're going to be subject to that kind of scrutiny?" O'Driscoll said.

The most recent version of Halverson's bill would require public officials, if they take actions or votes that could affect a spouse's finances, to disclose information about the potential conflict to a superior.

It would require the state Campaign Finance and Public Disclosure Board, which supports the measure, to audit or investigate public officials' financial and other disclosure statements. And it would close the loophole relating to independent-contractor income, requiring public officials to disclose what they earn from independent contracting, as well as the general area of contracting in which they work.

Several Minnesota public officials with undisclosed, independent sources of income have come under scrutiny in recent years, though state officials say the law is clear that they aren't required to make it public.

Former Gov. Tim Pawlenty was the subject of a 2003 complaint to the campaign finance board by the Minnesota DFL, alleging in part that when he filed to run for governor, he failed to disclose income from independent work. The campaign finance board dismissed the complaint, noting state law doesn't require such disclosure.

Lakeville Sen. Dave Thompson, a Republican running for governor this year, was the subject of such a complaint from DFLers in 2012 regarding income he received for independent consulting from the Republican Party of Minnesota. That complaint also was dismissed.

Shortly before he resigned in early 2013, former Rep. Steve Gottwalt, R-St. Cloud, came under scrutiny when reports surfaced that he was working as an independent contractor for a firm that had lobbied for legislation he helped steer through the House.

Minnesota gets D- in accountability

The Senate sponsor of the bill, Sen. Kent Eken, DFL-Twin Valley, said it's unlikely to advance this year in standalone form. But he still hopes all or part of it can pass this year by being added to another bill.

Halverson said she introduced her version of the bill after reading a report from the Center for Public Integrity, which showed Minnesota ranks middle of the pack among the 50 states on its so-called "Corruption Risk Report Card."

A 2012 investigation by the Center for Public Integrity, a Washington nonprofit, gave Minnesota a D+ in overall corruption risk. Global Integrity and Public Radio International also contributed to the report.

Minnesota got a D- in the area of legislative accountability. That part of the investigation examined whether lawmakers could be held accountable for their actions, if there were effective regulations to govern lawmakers' conflicts of interest and whether the public could access in-depth information about lawmakers' finances.

An unexpected finding of the report was that some states with notable histories of political corruption, such as New Jersey, received some of the best marks. The center's executive editor, Gordon Witkin, said that's because those states experienced the sorts of public scandals that were catalysts for reform.

In Minnesota, Witkin said, it's the opposite story.

"The state's historical reputation for clean government and relative lack of scandal had resulted in some complacency about keeping up with the kinds of reforms we found elsewhere," Witkin said.

Jeremy Schroeder is executive director of Common Cause Minnesota, a group that's advocating for the bill.

Schroeder said many other states require some level of disclosure about the finances of public officials' spouses.

Part of being in public service, Schroeder said, is opening up to demonstrate there are no conflicts or appearance of conflicts. Such conflicts can happen in Minnesota or anywhere else, he said.

"We think that it's every citizen's right," he said, "to know who's influencing their democracy and their government."

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